An “out-of-control” rogue trader accused of Britain’s biggest banking fraud
“was a gamble or two away from destroying Switzerland’s largest bank”, a
court heard yesterday.

Kweku Adoboli is accused of gambling away £1.4 billion while working as a trader at UBS in the City of London.

At one point, the 32-year-old former public schoolboy was at risk of causing the bank losses of £7.4 billion after he exceeded his trading limits in a desperate attempt to chase his losses.

Mr Adoboli, who denies two counts of fraud and two counts of false accounting between October 2008 and last September, allegedly gambled the money on high-risk trades in an attempt to increase his annual bonus and boost his job prospects, Southwark Crown Court was told.

Sasha Wass QC, prosecuting, said: “To put the huge trading loss in some sort of perspective, this sum of money would be enough to pay a year’s salary for nearly 70,000 new nurses or two Wembley stadiums or six new hospitals.”

She added: “Mr Adoboli was a gamble or two away from destroying Switzerland’s largest bank. In effect, Mr Adoboli was betting the entire bank on the toss of a coin.” The court heard that Mr Adoboli, the son of a Ghanaian diplomat, was head boy of Ackworth public school in West Yorkshire. He left Nottingham University in 2003 and started working for UBS as a graduate trainee.

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He worked for UBS’s global synthetic equities division, buying and selling exchange traded funds (ETFs), which track different types of stocks, bonds or commodities, such as metals. The bank set a daily trading limit for the ETF desk of $100 billion (£61.5 billion), and used hedging to reduce risk — for example, buying one type of investment and simultaneously selling a similar one to mitigate any loss.

It is alleged that Mr Adoboli began false accounting in 2008 after he made a trading loss of £250,000, which he attempted to conceal from his superiors.

Ms Wass said: “By trading unhedged he was disregarding the safety mechanisms set by the bank and putting its very existence at risk.”

Prosecutors claim that Mr Adoboli’s accounting system became so complex that in December 2009 he went into the office on Boxing Day to email the data to his home so he could work on it there.

The court heard that his earnings rose from £65,000 in 2008 to £360,000 in 2010 because “he had started to fraudulently gamble the bank’s money”.

Then, last September, William Steward, a chartered accountant for UBS, received a “bombshell email” from Adoboli admitting his fraud, the court heard. The email signed off: “I take full responsibility for my actions and the ---- storm that will now ensue. I am deeply sorry to have left this mess for everyone and to have put my bank and my colleagues at risk.” The trial was adjourned until Monday.